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To promote stable, constructive labor-management relations through the resolution and prevention of labor disputes in a manner that gives full effect to the collective-bargaining rights of employees, unions, and agencies.

Before the Authority: Phyllis N. Segal, Chair;
and
Donald S. Wasserman, Member

I. Statement of the Case

This matter is before the Authority on exceptions to an
award of Arbitrator Roberta J. Bahakel filed by the Union under section 7122(a)
of the Federal Service Labor-Management Relations Statute (the Statute) and
part 2425 of the Authority's Regulations. The Agency did not file an opposition
to the Union's exceptions.

The Arbitrator found that the grievance was not arbitrable
because it was barred by a prior settlement agreement. For the following
reasons, we remand the case to the parties for submission to the Arbitrator,
absent settlement, for further proceedings consistent with this decision.

II. Background and Arbitrator's
Award

On December 21, 1989, the Agency and Union signed an
agreement settling an October 1989 grievance regarding the exposure of certain
unit employees to asbestos.(1) The Union filed two more asbestos-related grievances, one
dated May 23, 1991, and a separate one dated June 3, 1991. According to the
Arbitrator, the May 1991 grievance contended that the December 1989 settlement
agreement was inadequate and treated the majority of the members unfairly and
unjustly.(2) The June 1991 grievance alleged that the entire bargaining
unit was entitled to environmental differential pay and hazardous duty pay for
ongoing exposure to asbestos from the date of employment or 1975, whichever
date was later. Exceptions, Exhibit B at 2.

The unresolved matter was submitted to the Arbitrator, who
identified the issues as:

1.Is the grievance dated May 23, 1991, timely?

2.Is the grievance dated May 23, 1991, arbitrable?

3.If the grievance is arbitrable and timely, did the
Agency violate the Work and Safety provisions of the contract in a manner where
the Union employees are entitled to be paid Environmental Differential Pay or
Hazardous Duty Pay for the time period beginning March 9, 1975 or the
employee's date of hire, whichever is later?

Award at 2.

Before the Arbitrator, the Agency argued that the 1989
settlement agreement barred the filing of any further grievances on the issue
of asbestos. The Union argued that the settlement agreement was invalid because
it was signed by the Union vice president, who did not have the authority to
sign such an agreement, and because the Agency knew the vice president lacked
such authority. The Union based this argument on a letter, dated December 8,
1989, sent by the Union president to management, which stated: "The Union
president will make all final decisions on Step 3 and above issues unless he
designates someone else." Exceptions, Exhibit F at 2.

The Arbitrator concluded that the grievance before her
was timely but not arbitrable. The Arbitrator found that the vice president had
the authority to sign the settlement agreement because the president had told
him to "handle" and "take care" of it. Award at 8. Furthermore, the Arbitrator
determined that the letter did not terminate the vice president's authority
because it did not constitute proper notice to management. Therefore, the
Arbitrator found that the settlement agreement was valid and that it barred
arbitration of the grievance. Accordingly, the Arbitrator denied the
grievance.

III. Exceptions

First, the Union argues that the award is a
"misinterpretation and misapplication of the law of agency as applied to the
facts of this case." Exceptions at iii. Specifically, the Union contends the
Arbitrator erred in finding that the Union vice president had the authority to
negotiate or sign the December 1989 settlement agreement. Based on the letter
of December 8, 1989, the Union argues that its vice president was acting beyond
the scope of his authority. The Union contends that the letter limited the vice
president's apparent authority on final decisions on step 3 and above, and
that, because the Agency had knowledge of this limitation, the Agency could no
longer negotiate with him concerning the settlement of this grievance.

Second, the Union contends that the Arbitrator's decision
was based on the wrong grievance. The Union argues the June 1991 grievance was
the only grievance before the Arbitrator. According to the Union, the May
grievance was submitted to the Arbitrator only as evidence on an issue of
timeliness concerning the June 1991 grievance.

Third, the Union contends that the December 1989 settlement
agreement could bar claims only before the date of the signing of the
agreement. The Union notes that the June 1991 grievance deals with risks of
asbestos exposure that occurred after December 1989. It argues that the
settlement agreement cannot bar claims against risks that were unknown to the
parties at the time.

Fourth, the Union asserts that the Arbitrator erred in
finding that the December 1989 settlement agreement, which pertained only to
the employees of engineering service, dietetic service, and the telephone
switchboard room, barred the current grievance, which was brought on behalf of
all the unit employees at the hospital. The Union argues that this denies those
employees who were not covered by the October 1989 grievance of their right to
"grieve and be represented[.]" Exceptions at 4.

IV. Analysis and Conclusions

A.The Award Is Not Contrary to Law

As the Union alleges that the Arbitrator's findings are
contrary to the law of agency, we review those exceptions denovo. National Treasury Employees Union, Chapter 24 and U.S.
Department of the Treasury, Internal Revenue Service, 50 FLRA 330, 332
(1995) (citing U.S. Customs Service v. FLRA, 43 F.3d 682, 686-87 (D.C.
Cir. 1994)).

The authority of the vice president to sign the settlement
agreement is determined under principles of agency law. Applying these
principles, the enforceability of the December 1989 settlement agreement
requires an examination of: (1) the scope of the vice president's authority to
enter into a settlement agreement; and (2) whether the December 8 letter
effectively terminated that authority.

In an agency relationship a principal confides to an agent
the management of business to be transacted in the former's name. Seegenerally 3 Am. Jur. 2d Agency § 1 (1986). The authority of
an agent to act on behalf of the principal can be either actual or apparent.
Actual authority is authority that the principal has intentionally conferred
upon the agent. See, for example, U.S. v. Schaltenbrand,
930 F.2d 1554, 1560 (11th Cir. 1991). Apparent authority occurs where the
principal has held out the agent as having such authority or has permitted the
agent to represent that he has such authority. 3 Am. Jur. 2d Agency
§ 78 (1986). It has been held that "when an agent is appointed to
negotiate a collective-bargaining agreement that agent is deemed to have
apparent authority to bind his principal in the absence of clear notice to the
contrary." Metco Products, Inc. v. NLRB, 884 F.2d 156, 159 (4th Cir.
1989) (Metco) (citing University of Bridgeport, 229 NLRB
1074 (1977)).

Authority will be terminated if the agent is given
sufficient notice. 3 Am. Jur. 2d Agency § 51 (1986).
Sufficient notice occurs if the agent actually knows, or has reason to know,
facts indicating that the authority has been terminated. Id. However,
the acts of an agent whose authority has been revoked may continue to bind a
principal as against third persons who, in the absence of notice of the
revocation of the agent's authority, rely upon its continued existence. 3 Am.
Jur. 2d Agency § 52 (1986). SeeSouthwest Sunsites, Inc.
v. F.T.C., 785 F.2d 1431, 1438 (9th Cir. 1986) (a principal is bound by the
acts of its agent if those acts are within the scope of the agent's authority,
unless the third party has actual notice that the acts are unauthorized).

In this case, the Arbitrator found that the Union president
told the vice president to "handle" and "take care" of the October 1989
grievance. Award at 6. The Arbitrator also found that the union's national vice
president, in a letter to the local president, stated that the local vice
president told him that the president had given him the case to handle.
Id. Based on these findings, we conclude that, at a minimum, the vice
president had apparent authority to negotiate the October 1989 agreement
because he had been appointed to negotiate that agreement. Metco, 884
F.2d at 159. The Arbitrator did not find that this authority was limited
in any way. Based on the Arbitrator's findings, we conclude that the president
gave the vice president the authority to negotiate the settlement agreement,
and that this authority was not limited.

Further, the Arbitrator did not find that the vice
president's authority was later terminated. Rather, the Arbitrator credited the
vice president's testimony that he had discussed the settlement with the
president, who never told him that he should not proceed with it. Award at 6.
Moreover, we note that the vice president continued to exercise such authority
14 months after the events at issue here, when he signed a supplemental
agreement detailing the payments to be made as part of the settlement
agreement. Exceptions, Exhibit I at 1.

In any event, the Union would still be bound by the vice
president's acts unless the Agency had clear and actual notice that his
authority had been terminated. Southwest Sunsites, Inc., 785 F.2d at
1438; Metco, 884 F.2d at 159. The Union argues that the December 8
letter gave such notice by stating that the president "will make all final
decisions on Step 3 and above issues unless he designates someone else."
Exceptions, Exhibit F at 2. However, the Arbitrator found that the letter did
not constitute proper notice to management of a termination of any authority
the vice president may have had. Consistent with this finding, and the others
set forth above, we conclude that the settlement agreement is enforceable.
Accordingly, the award is not deficient on this basis.

B.A Remand Is Necessary to Clarify Which Grievance and
What Issues Were Before the Arbitrator

From the limited evidence before us, we are unable to
determine which grievance the Arbitrator was addressing. Although the record
indicates that the June grievance was submitted to arbitration, the Arbitrator
does not mention that grievance in the award. Moreover, the grievance the
Arbitrator describes in her award differs significantly from the June
grievance. In her award, the Arbitrator refers only to the May 1991 grievance,
which is not in the record. The Union contends, however, that the May grievance
was submitted solely as evidence in the arbitration hearing concerning the June
grievance. In support, the Union furnishes what it claims are portions of the
transcript and briefs from that hearing that appear to establish that the June
grievance was at issue.

Because of our uncertainty regarding whether the award in
fact addresses the May grievance, and if so, what that grievance covered, we
are unable to dispose of the remainder of the Union's exceptions. As we cannot
determine from the record before us whether the award is deficient, we remand
this case to the parties for submission to the Arbitrator, absent settlement,
to clarify which grievance the Arbitrator found to be not arbitrable, and the
issues, if necessary, that were covered by the May 1991 grievance. SeeU.S. Department of the Air Force, Scott Air Force Base, Illinois and
National Association of Government Employees, Local R7-23, 38 FLRA 32
(1990) (case remanded because the subject matter of the grievance was
unclear).

On remand, a determination that the award covered claims
that arose after October 1989 would have the effect, as claimed by the Union,
of barring asbestos-related claims arising after the effective date of
the settlement agreement, including claims of employees who were not covered by
the agreement. We cannot determine from the award whether the Union argued to
the Arbitrator, as it does before the Authority, that the settlement agreement
cannot have such effects.(3)

Due to the seriousness of the potential consequences and
the fact that we are remanding the case on another basis, we conclude that it
is appropriate to request a determination from the Arbitrator as to whether the
Union raised in the initial hearing the issues of whether the settlement
agreement could bar (1) grievances that arose after its execution, or (2)
grievances filed on behalf of the entire unit. Therefore, we remand as well for
a clarification of the issues that were raised before the Arbitrator.
SeeArmy and Air Force Exchange Service and American Federation of
Government Employees, Local No. 2965, 33 FLRA 420 (1988) (case remanded due
to insufficient information in the record for the Authority to rule on the
exceptions).

V. Decision

This case is remanded to the parties for submission to the
Arbitrator, absent settlement, for further proceedings consistent with this
decision.

This agreement bars the filing of any action(s), except
for the filing of a claim with the Office of Worker's Compensation, by the
Union, as well as present and past employees of VAMC Birmingham for the period
prior to October 1, 1983, and from October 1, 1983, and to the signing of this
agreement.

Exceptions, Exhibit I at 5.

2. The Authority was not provided with
a copy of the May 1991 grievance.

3. Under section 2429.5 of the
Authority's Regulations, the Authority will not consider issues that could have
been, but were not, presented to the arbitrator. E.g., American
Federation of Government Employees, Local 3295 and U.S. Department of the
Treasury, Office of Thrift Supervision, Washington, D.C., 51 FLRA 27
(1995).